U.S. judge sentences couple to jail for stealing GM trade secrets

DETROIT-- A Michigan couple found guilty of stealing General Motors trade secrets related to hybrid-car technology was sentenced to jail in U.S. District Court in Detroit.

Former GM engineer Shanshan Du and her husband, Yu Qin, stole GM hybrid technology for a business venture to provide hybrid electric vehicle technology to Chery Automobile Co., a Chinese auto manufacturer and GM competitor.

In November, Du was convicted of conspiracy to possess trade secrets without authorization and two counts of unauthorized possession of trade secrets. She was acquitted of three counts of wire fraud.

U.S. District Judge Marianne Battani on Wednesday sentenced Du to 12 months and one day total on all three counts, served concurrently. Du also will have one year of supervised release. She was fined $100 for each count and fined another $12,500.

Qin was found guilty of conspiracy to possess trade secrets without authorization, two counts of unauthorized possession of trade secrets, three counts of wire fraud and one count of obstruction of justice.

He was sentenced to 36 months total on all seven counts, also served concurrently. Qin will pay $100 for each count, plus another fine of $25,000.

Addressing the court

Both Du and Qin cried as they addressed the court, with Du shaking intensely at times. Du's health issues include anxiety, depression and a bout with cancer in 2009, according to her attorney, Robert Morgan.

"This is all my fault," Qin said just before the sentencing. "I want to take full responsibility for it."

Du, who was hired in 2000 as an engineer for GM's Advanced Technology Vehicles Group in suburban Detroit, copied 16,262 documents covering hybrid vehicles on a thumb drive in February 2005, about five days after being offered a severance agreement. Of the more than 16,000 documents Du copied, nearly 20 contained trade secrets.

Although trade secret theft isn't a violent crime, Battani said Du and Qin still committed a serious offense because of its economic implications.

Battani called Qin "brilliant" but said he took a shortcut because he didn't have the time to develop the technology himself. Qin knew, Battani said, that he wasn't supposed to have GM's proprietary information.

"It's a crime in which our whole community, our whole economic structure, is a victim," Battani said. "The court has to protect the integrity of the economic structure."

Prosecutor Michael Martin said Tuesday that Du had a duty to protect GM's information, but she ended up betraying the automaker's trust.

GM said intellectual property that it relies on as the foundation of future designs is the company's "life blood."

The automaker asked for the maximum allowable sentence, which was 10 years under the sentencing guidelines.

"GM developed the stolen trade secrets over many years, using highly specialized engineers, equipment and facilities," John Calabrese, GM's vice president of global vehicle engineering, wrote in an April 22 letter to Battani.

"Defendant's plans to provide the technology to a Chinese competitor would have saved that Chinese company considerable expenditures and time and boosted its competitive status at the expense of GM."

Trade secret value

Both sides grappled with the value of documents in court Tuesday.

While the prosecution placed their value at $46 million in line with GM estimates, Qin's attorney, Frank Eaman of Detroit, said they were only worth $875,000.

Eaman said GM didn't suffer any "out of pocket" losses and that the documents provided no economic benefit to the defendants.

The prosecution argued that half of the GM information Du stole was included in GM licensing agreements with the former DaimlerChrysler and BMW.

In 2004, GM licensed its hybrid vehicle technology to DaimlerChrysler for $55 million. A year later, GM licensed for $21 million the technology to BMW in a similar deal, according to a court document.

To get the fair market value of the stolen information, the prosecution cut those figures in half to get $27.5 million from the DaimlerChrysler deal and $10.5 million from BMW. The prosecution also added $8 million to account for the manpower it took to create the technology.